Research RES LEGAL Support system Country: Netherlands
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1 Research RES LEGAL Support system Country: Netherlands 1. Overview of support system Overview of support system Support schemes Promoted technologies Statutory provisions In the Netherlands, electricity from renewable sources is promoted mainly through a premium tariff (bonuses on top of the wholesale price). Furthermore, RES are promoted through tax benefits. Premium tariff. The Netherlands have introduced a premium tariff (bonuses on top of the wholesale price) to promote the generation of electricity from renewable sources. Tax regulation mechanisms. Generators of electricity from renewable sources that use the electricity they consume (own consumption clause) may be exempt from the tax levied on electricity consumption (Ecotax). Moreover, enterprises are eligible for tax credits (EIAs) for investment in renewable energy systems. In the Netherlands, all technologies are eligible for at least one support scheme. However, each support scheme has a different focus. Electricity Act (Elektriciteitswet 1998 general law on electricity) Wet IB 2001 (Wet van 11 mei 2000 tot vaststelling van de Wet inkomstenbelasting 2001 Income Tax Act) WBM (Wet Belastingen op Milieugrondslag Act Introducing the Environmental Tax) RGO (Regeling garanties van oorsprong voor duurzame elektriciteit Regulation on the Certificates of Origin for Electricity from Renewable Sources) SDE (Besluit stimulering duurzame energieproductie Order to Incentivise Sustainable Energy Generation) RAC 2011 (Regeling aanwijzing categorieën duurzame energieproductie 2011 Regulation on the Categorisation of Sustainable Energy Generation) Energy List 2011 (Energielijst 2011) 1
2 2. Basic information on legal sources Name of legal source (original language) Elektriciteitswet 1998 Wet inkomstenbelasting 2001 Wet belastingen op milieugrondslag Full name Name of legal source (English) Abbreviated form Entry into force Last amended on Electricity Act Act on the Income Tax Act on the Environmental Protection Tax Electricity Act Wet IB 2001 WBM Future amendments Purpose Relevance for renewable energy Link to full text of legal source (original language) Link to full text of legal source (English) Regulating the generation, transmission and sale of electricity. The act introduces bonuses for the generation of electricity from renewable sources (SDE scheme). Furthermore, it is the legal basis for legislation on the issue of certificates of origin for renewable energy /geldigheidsdatum_ Regulating the income tax The act introduces a tax credit on investments in renewable energy, the EIA (Energy Investment Allowance or Investeringsaftrek). ldigheidsdatum_ Introduction of an environmental protection tax, among other things on energy consumption. The act aims to reduce energy consumption and carbon dioxide emissions. The act introduces tax exemption for generators of electricity from renewable sources that consume the electricity they generate (own consumption clause). eldigheidsdatum_ #HoofdstukV
3 Name of legal source (original language) Regeling garanties van oorsprong voor duurzame elektriciteit Full name Name of legal source (English) Abbreviated form Entry into force Last amended on Regulation on Guarantees of Origin for Renewable Electricity RGO Future amendments Purpose Relevance for renewable energy Link to full text of legal source (original language) Link to full text of legal source (English) This regulation provides rules for the issue of certificates of origin for electricity from renewable sources. The regulation aims to support renewable energy only /geldigheidsdatum_ tion/doc/electricity/member_states/nl _2003_regulation_2003_12_08_en.p df The English translation does not provide information on the latest amendment of the Act. Name of legal source (original language) Besluit stimulering duurzame energieproductie Regeling aanwijzing categorieën duurzame energieproductie 2011 Energie en Bedrijven - Energielijst
4 Full name Name of legal source (English) Abbreviated form Resolution to Stimulate Sustainable Energy Generation SDE RAC 2011 Regeling van de Minister van Economische Zaken, Landbouw en Innovatie van 25 mei 20011, nr. WJZ/ , houdende aanwijzing van categorieën van productieinstallaties voor de stimulering van duurzame energieproductie in het jaar 2011 (Regeling aanwijzing categorieën duurzame energieproductie 2011) Regulation on the Categorisation of Sustainable Energy Generation Energy List 2011 Entry into force Last amended on Future amendments at the beginning of every year Purpose Relevance for renewable energy Support for the generation of electricity from renewable sources through a feed-in tariff. This regulation provides information on the individual types of renewable energy generation and on the calculation of subsidies under the SDE+ scheme. This list is updated annually and describes eligible investments for the EIA scheme in detail. The list also describes eligible investments in the field of renewable energy. Link to full text of legal source (original language) Link to full text of legal source (English) 755/geldigheidsdatum_ rt html ault/files/bijlagen/energie%20en%20bedrij ven%20-%20energielijst% pdf 4
5 3. Further information Institution (name) Website Name of contact person (optional) Telephone number (head office) (optional) Ministerie van Economische Zaken, Landbouw en Innovatie (Ministry of Economic Affairs, Agriculture and Innovation) Agentschap NL (Dutch Energy Agency) Energy Research Centre (ECN)
6 4. Support schemes 4.1. Subsidies Abbreviated form of legal source(s) Country-specific support system. Promoted technologies General information Wind energy Solar energy Geothermal energy Biogas Hydro-electricity Biomass Amount Beneficiaries Obligated party. Entitled party. Competent authority Flexibility Mechanism State Funding Consumers System operator Grid operator Distribution mechanism 6
7 4.2. Premium Tariff (SDE) Abbreviated form of legal source(s) Country-specific support system Promoted technologies SDE RAC 2011 RGO The SDE+ scheme grants to the producers of renewable energy a bonus payment, which aims to compensate for the difference between the wholesale price of electricity from fossil sources and the price of electricity from renewable sources and is paid for a period of up to 15 years. This scheme applies to newly constructed installations only. Under the SDE+ scheme, the funds available are no longer distributed in such a way as to provide an individual budget for each technology. Now, there is a single budget for all technologies, i.e. all technologies compete against each other for subsidies. Subsidies are made available in 4 stages; the level of subsidy increases with every stage. Subsidies are allocated on a "first come, first serve basis: Applicants applying at a later stage run the risk of being rejected due to a lack of funds. In general, the SDE+ scheme gives an advantage to those applying for lower subsidies and at an early stage of the allocation process. In general, all renewable energy sources are eligible for the scheme. Subsidies are made available in 4 stages. The maximum basic subsidy and the eligible technologies differ at each stage. The basic subsidy is annually calculated by the Ministry of Economic Affairs (Article 11 (1) SDE). In addition, the Ministry will annually set a correction value by which the basic subsidy will be reduced (Article 14 (1) (a) SDE). As far as eligibility is concerned, RAC 2011 describes the eligible categories of General information technologies (landfill and sewage gas, hydro energy, biomass, onshore wind). There is also an open ("free") category which comprises technologies that require higher funding (PV, offshore wind, geothermal energy). As confirmed by the Dutch energy agency, all installations must be completed and put into operation within 4 years after the subsidy was granted, except for PV systems, which have to be completed after 3 years, and offshore wind systems located in national waters, which have to be completed within 5 years. Eligible. Onshore Wind: Eligible within a specific category ( 3.5 RAC 2011). Installations < 6 MW: subsidies may be awarded for a maximum of 1760 full load hours/year (Article 28 (a) in conjunction with Article 26 (1) (a) RAC 2011). Installations 6 MW: Wind energy Funding is provided for a maximum of 2400 full load hours/year (Article 28 (b) in conjunction with Article 26 (1) (b) RAC 2011). Offshore wind (in national waters and in the sea): Eligible within the open category (offshore wind > 3 MW in national waters RAC 2011; offshore wind in the sea RAC 2011). Solar energy Eligible. 7
8 Amount Geothermal energy Biogas Hydro-electricity Biomass General information Eligible within the open category ( RAC 2011). Only PV systems with a capacity > 15 kwp are eligible. Funding is provided for a maximum of 1000 full load hours/year (Article 42 in conjunction with Article 40 (1) RAC 2011). Eligible. Eligible within the open category ( RAC 2011). Installations are eligible only if the drilling depth is at least 500 metres (Article 52 (1) RAC 2011). Funding is provided for a maximum of 6000 full load hours/year (Article 54 in conjunction with Article 52 (1) RAC 2011). Eligible. Biogas: Eligible within a specific category ( 3.4 RAC 2011). Systems are eligible if they use combustion of biogas from the co-fermentation of animal waste (Article 21 (1) (a) RAC 2011) or combustion of biogas from the fermentation of other substances (Article 21 (1) (b) RAC 2011). Funding is provided for a maximum of 8000 full load hours/year (Article 23 in conjunction with Article 21 (1) RAC 2011). Landfill and sewage gas: Eligible within a specific category ( 3.2. RAC 2011). Electricity is eligible if generated from landfill and sewage gas (Article 10 (1) RAC 2011). Funding is provided for a maximum of 8000 full load hours/year (article 13 in conjunction with Article 10 (1) RAC 2011). Eligible. Eligible within a specific category ( 3.3. RAC 2011). In order to be eligible, plants shall have a drop height of at least 50 cm (Article 16 (1) (a) RAC 2011). Plants whose drop height is 50 cm to 5 m are eligible for subsidies for 3800 full load hours/year (Article18 (a) in conjunction with Article 16 (1) (a) RAC 2011). Plants with a drop height of 5 m are eligible for subsidies for up to 4800 full load hours/year (Article 18 (b) in conjunction with Article 16 (1) (b) RAC 2011). Eligible. Systems 10 MW: Eligible within the open category ( 3.4 RAC 2011). Eligibility applies to systems that generate electricity from thermal conversion of liquid biomass and have a capacity of 10 MW (Article 44 (1) RAC 2011). Funding is provided for a maximum of 8000 full load hours/year (Article 46 in conjunction with Article 44 (1) RAC 2011). Systems > 10 MW: Eligible within a specific category ( 3.4 RAC 2011). Eligibility applies to systems that generate electricity from thermal conversion of liquid biomass and have a capacity of > 10 MW (Article 21 (1) RAC 2011). Funding is provided for a maximum of 8000 full load hours/year (Article 23 in conjunction with Article 21 (1) RAC 2011). The amount of subsidy is different for each renewable energy generation technology. The maximum basic subsidy and the level of funding awarded in each of the 4 stages differ according to the technology and the system size. According to information provided by the Dutch energy agency, Agentschap NL, the support levels for 2011 are as follows: 8
9 Degression Onshore: Stage 1: ct 11.3 per kwh, stages 2-4: ct 12 per kwh Wind energy Offshore: Stage 1: ct 11.3 per kwh, stage 2: ct 13.8 per kwh, stage 3: ct 16.3 per kwh, stage 4: ct 18.8 per kwh Stage 1: ct 9 per kwh, stage 2: ct 11 per kwh, stage 3: ct 13 per kwh, stage 4: Solar energy ct 15 per kwh Stage 1: ct 9 per kwh, stage 2: ct 11 per kwh, stage 3: ct 13 per kwh, stage 4: Geothermal energy ct 15 per kwh Biogas: (Co)fermentation of animal waste: Stage 1: ct 9-14 per kwh, stage 2: ct per kwh, stage 3: ct per kwh, stage 4: ct per kwh Biogas Fermentation of other substances: Stage 1: ct 9-14 per kwh, stage 2: ct per kwh, stages 3 and 4: ct per kwh Landfill and sewage gas: Stages 1-4: ct 6 per kwh Drop height from 50 cm to 5 m: Stage 1: ct 9 per kwh, stage 2: ct 11 per kwh, stages 3 and 4: ct 12.2 per kwh Hydro-electricity Drop height 5 m: Stages 1-4: ct 7.1 per kwh Systems 10 MW: Stage 1: ct per kwh, stage 2: ct per kwh, stages 3 and 4: ct per kwh Biomass Systems > 10 MW: Stage 1: ct 9-14 per kwh, stage 2: ct per kwh, stage 3: ct per kwh, stage 4: ct per kwh The basic subsidy is annually calculated by the Ministry of Economic Affairs (Article. 11 (1) SDE). In addition, the Ministry will annually set a correction value by which General information the basic subsidy will be reduced (Article 14 (1) (a) SDE). The correction values for 2011 have already been published in RAC 2011 ( 3.7 RAC 2011). Onshore: Plants < 6 MW: ct 4.7 per kwh (Article 72 (1) (a) RAC 2011) Plants 6 MW : ct 4.8 per kwh (Article 74 (2) (a) RAC 2011) Wind energy Offshore: National waters: ct 4.8 per kwh (Article 73 (a) RAC 2011) Sea: ct per kwh (Article 74 (a) RAC 2011) Solar energy PV > 15 kwp: ct 4.6 per kwh (Article 75 (a) RAC 2011) Geothermal energy ct 4.2 per kwh (Article 78 (a) RAC 2011) 9
10 Cap Eligibility period Beneficiaries Biogas: Fermentation of animal waste: ct 4.2 per kwh (Article 71 (1) (a) RAC 2011) Biogas Fermentation of other substances: ct 4.2 per kwh (Article 71 (2) (a) RAC 2011) Landfill and sewage gas: ct 4.2 per kwh (Article 69 (a) RAC 2011) Drop height from 50 cm to 5 m: ct 4.2 per kwh (Article 70 (1) (a) RAC 2011) Hydro-electricity Drop height > 5 m: ct 4.2 per kwh (Article 70 (2) (a) RAC 2011) Systems 10 MW: ct 4.2 per kwh (Article 76 (a) RAC 2011) Biomass Systems > 10 MW: ct 4.2 per kwh (Article 71 (3) (a) RAC 2011) The scheme's budget is capped at 750 m for the period from 1 July 2011 to 30 December 2011 (Article 2 (1) RAC 2011). If the available funds are exhausted prior to 30 December 2011, the 2011 scheme will close early. Subsidies are paid for a period of 15 years starting at the date of commissioning of the system in question (Article 7 SDE in conjunction with Articles 17 (1), 27 (1), 32 (1), 36 (1), 41 (1), 53 (1) RAC 2011). Subsidies for the generation of biomass and biogas, however, are paid for a period of up to 12 years (Article 7 SDE in conjunction with Articles 12 (1), 22 (1), 45 (1) RAC 2011). Entitled party. Every generator is eligible for subsidies, e.g. private individuals, companies and institutions that generate electricity from renewable sources (Art. 8 par. 1 SDE). Obligated party. The Dutch energy agency, Agentschap NL, is obligated to provide subsidies. In order to receive a subsidy under SDE+, a generator must apply (online) to the Dutch energy agency, Agentschap NL, between 1 July 2011 and 30 December 2011 (Article 2 (1) RAC 2011). There are different stages (see below) for the specific categories and the open category. Applicants may submit only one application per stage, per category and per address on which the system is planned to be installed (Article 2 (3) RAC 2011). According to information from the Dutch energy agency, applications are processed in order of receipt. The energy agency will decide on an application, i.e. on the award of a subsidy, within three months. Subsidies under the SDE+ scheme are awarded only under the condition that the applicant presents certificates of origin to the Dutch energy agency to prove that the electricity offered was generated from renewable sources (Article 2 RGO). The following stages were set for the specific categories: Stage 1: 1 July December 2011 (17:00) Stage 2: 31 August December 2011 (17:00) Stage 3: 31 October December 2011 (17:00) Stage 4: 30 November December 2011 (17:00) The following stages were set for applications under the open category: Stage 1: 1 July August 2011 (17:00) 10
11 Flexibility Mechanism Competent authority Stage 2: 31 August 2011 (17:00) 31 October 2011 (17:00) Stage 3: 31 October 2011 (17:00) 30 November 2011 (17:00) Stage 4: 30 November 2011 (17:00) 30 December 2011 (17:00) The Dutch energy agency Agentschap NL Certificates of origin are issued, in line with the regulations specified in RGO, and examined by CertiQ, an independent body for the issue of certificates of origin in the Netherlands. Funding State Consumers Grid operator The Dutch state bears the costs. The Ministry of Economic Affairs, Agriculture and Innovation has provided funds of 750 m for the SDE+ scheme (Article 2 (1) RAC 2011). System operator Distribution mechanism 11
12 4.4. Tax regulation mechanisms I (Reduction of environmental protection tax) Abbreviated form of legal source(s) Country-specific support system Promoted technologies Amount Beneficiaries WBM As a rule, electricity consumption in the Netherlands is taxable for an environmental protection tax (Article 48 (1) in conjunction with Article 50 (1) WBM). A given consumer is exempt from this tax if the electricity consumed is electricity from renewable sources and was generated by the consumer himself (own consumption clause) (Article 64 (1) in conjunction with Article 50 (4), (5) WBM). The exemption from tax on electricity generated for a consumer's own use generally applies to General information all renewable energy generation technologies. Wind energy Eligible (Article 47 (i) WBM). Solar energy Eligible (Article 47 (i) WBM). Geothermal energy Eligible (Article 47 (i) WBM). Biogas Eligible (Article 47 (i) WBM). Eligible (Article 47 (i) WBM). In addition to traditional hydro power plants, plants generating Hydro-electricity electricity from waves and tidal flows are also eligible for tax exemption. Only electricity generated from pure biomass is eligible (Article 47 (i) in conjunction with Article Biomass 50 (5) (a) WBM). There are several tax bands depending on the level of consumption. The amount of tax payable per 12-month period is as follows: Consumption of less than kwh: per kwh (Article 59 (1) (c) WBM); Consumption between kwh and kwh: per kwh (Article 59 (1) (c) WBM); Consumption between kwh and kwh: per kwh (Article 59 (1) (c) WBM); Consumption of more than kwh: per kwh (for private use) and per kwh (for commercial use) (Article 59 (1) (c) WBM); Electricity from renewable sources is exempt from this tax if the electricity was generated by the consumer himself (Article 64 (1) in conjunction with Article 50 (4), (5) WBM). Entitled party. The parties entitled to tax exemption are those generators of electricity from renewable sources that consume the electricity they generate (Article 64 (1) in conjunction with Article 50 (4), (5) WBM). The claim for tax exemption has to be issued against the tax office together with the tax return. Competent authority Flexibility Mechanism Funding State Consumers The tax reduction is financed from the federal budget of the Netherlands. 12
13 Grid operator System operator Distribution mechanism 13
14 4.5. Tax regulation mechanisms II (EIA) Abbreviated form of legal source(s) Country-specific support system Promoted technologies Amount Beneficiaries Wet IB 2001 Energy List 2011 This means of promotion enables entrepreneurs based in the Netherlands to write off investments in renewable energy systems against tax (Article 3.42 Wet IB 2001). The conditions for subsidies are extensively described in the Energy List. The level of funding depends, among other things, on the source of energy and the type of system used. Investments of less than 450 Euros are ineligible (Article 3.45 Wet IB 2001). Furthermore, a total of at least 2,200 Euros must be invested in eligible projects within one year (Article 3.42 Wet IB 2001). All technologies are eligible, except for geothermal energy and electricity from biogas. The Energy List sets out which investments are actually eligible. Published by the Dutch energy General information agency (Agentschap NL), the Energy List provides an overview of eligible investments in renewable energy. Wind energy Both onshore and offshore wind energy is eligible (Energy List 2009 no ). Solar energy Eligible (Energy List 2009 no ). Geothermal energy Biogas Hydro-electricity Eligible (Energy List 2009 no ). Biomass Eligible (Energy List 2009 no ). The amount of tax allowance may be up to 41.5% of the total investments made in renewable energy or energy-efficiency technologies within one year (Art (3) Wet IB 2001). The maximum project costs per company are 116 m per calendar year (Article 2.42 (6) Wet IB 2011). Investments of less than 450 Euros are not eligible for the tax allowance (Article 3.45 (1) (a) Wet IB 2001). The total sum of investments in eligible projects shall reach 2,200 Euros within one year (Article 3.42 (3) Wet IB 2001).The Minister of Economic Affairs may reduce the allowance or reject applications if the expenses for this means of promotion threaten to exceed the budget provided. His/her decisions are published and do not affect allowances already granted. Entitled party. The entitled parties are enterprises that invest in plants generating electricity from renewable energy sources, in energy-saving projects or in technologies improving energy efficiency (Article 3.42 in conjunction with Article 3.43 Wet IB 2001). Private individuals are not entitled to tax benefits. As confirmed by the Dutch energy agency, tax credit is awarded according to the following procedure: 1. Application to IRWA. The companies have to apply for a tax reduction to the IRWA. 2. Evaluation and award. The IRWA forwards the application to the Dutch energy agency. Having evaluated an application and if necessary made inquiries to the applicant, the energy agency approves the application and sends it back to the IRWA. 3. Final decision. The tax authority has the last say, i.e. it may decide to authorise the tax credit awarded by the energy agency in full or only in part. 14
15 Flexibility Mechanism Competent authority State Consumers Investment Schemes and Arbitrary Depreciation Office (IRWA)/Dutch energy agency (Agentschap NL) The costs arising from the tax credit scheme are borne by the state, as it receives lower tax revenue. Funding Grid operator System operator Distribution mechanism 15
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